Chile Annual GDP Growth Strongest in Near 6 Years
The economy of Chile advanced 5.3 percent year-on-year in the second quarter of 2018, faster than an upwardly revised 4.3 percent expansion in the previous period and beating market consensus of a 4.0 percent rise. It was the strongest growth since the third quarter of 2012, as fixed investment, household spending and government spending increased sharply. Among economic activities, the manufacturing and trade sectors were the main contributors to growth.
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Year-on-year, fixed investment rose strongly (7.1 percent vs 3.1 percent in Q1), boosted by investment in machinery and equipment (12.5 percent vs 5.2 percent) and investment in construction (4.0 percent vs 1.9 percent). Additionaly, household spending (4.2 percent vs 3.4 percent) and government spending (2.8 percent vs 1.5 percent) continued to grow. Meanwhile, net external demand contributed negatively to growth as imports jumped 10.0 percent (vs 6.1 percent in Q1), amid higher purchases of metallic products, machinery and equipment; fuels and chemicals. At the same time, exports advanced at a softer 7.5 percent (vs 7.1 percent), boosted by shipments of copper and manufactured products.
On the production side, output went up markedly in manufacturing (7.3 percent vs 3.2 percent), led by production of food (9.4 percent vs 4.5 percent), beverages & tobacco (13.6 percent vs 0.1 percent) and metallic products, machinery and equipment (8.0 percent vs 7.7 percent); as well as for internal trade (8.1 percent vs 6.0 percent). Faster growth was also recorded in: financial intermediation (4.4 percent vs 4.2 percent); business services (5.4 percent vs 3.3 percent); construction (4.6 percent vs 2.5 percent); fisheries (10.5 percent vs -6.5 percent) and agriculture (7.8 percent vs 1.2 percent). Meanwhile, activity slowed in mining and quarrying (4.8 percent vs 19.1 percent), as copper production rose less (4.7 percent 20.4 percent); utilities (5.0 percent vs 5.6 percent); restaurants & hotels (3.7 percent vs 4.6 percent); transport (4.8 percent vs 5.0 percent) and information and communication (4.0 percent vs 4.7 percent).
On a seasonally adjusted quarterly basis, the GDP expanded 0.7 percent, compared to a 1.2 percent rise in the first quarter of 2018.